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Govt says time not ripe for Air India disinvestment

The statement comes as Air India widened its net loss in FY19 despite the fact that it received the second-largest capital infusion from the govt in the last 5 years
New Delhi: In view of volatile crude prices and adverse fluctuations in exchange rates, the present environment is not conducive to stimulate interest among investors for the strategic disinvestment of Air India in the near future, Minister for Civil Aviation Hardeep Singh Puri said on Thursday. The ministry, therefore, is likely to take up the issue once global economic indicators, including oil prices and forex indicators, stabilise, Puri added. While furnishing a written response to a question in the Lok Sabha, Puri reiterated, “The government remains committed to the disinvestment of Air India.” He added that the Air India Specific Alternative Mechanism (AISAM) has approved the contours for the sale of subsidiaries of Air India and has directed to expedite the sale of Air India Air Transport Services Ltd (AIATSL).

The Plan B

The government had earlier attempted to disinvest Air India in 2018 but had failed to elicit interest from bidders. The Centre had then decided to sell Air India’s land assets to raise money. In the meanwhile, the government has also put in place a revival plan for the airline that involves a comprehensive financial package. Since 2014, the government has infused a total of Rs 17,320 crores into the airline to get it back on its feet. While the highest capital infusion from the government came in 2014-15 when it poured Rs 5,780 crores into the national carrier, the funds infused by the Centre in 2018-19 (Rs 3,975 crores) was the second-highest in the last five years.

Still, Air India’s finances deteriorate

The response furnished by Puri in the Lok Sabha also showed that the airline’s net loss has widened to Rs 7,635 crores in FY 2018-19, up from Rs 5,348 crores in financial year 2017-18. This comes even as the airline received the second-largest fund infusion from the government in the last five years.